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Because of fiscal uncertainty, in the first months of 2018, banks operating in the country reduced by 16% the amount invested in public debt securities in the local market.

Against the backdrop of doubts about the future of public finances in Costa Rica, it was reported that from January to September, 14 local public and private banks invested $3.190 million in government bonds.

In Costa Rica, the private sector anticipates adverse effects on the export and tourism sector's competitiveness if the Ministry of Finance succeeds in consolidating its plan to issue $6 billion in bonds in the international market over the next six years.

The reaction of the country's export sector comes after the government announced this week that it will ask the Congress for authorization to issue bonds in international markets for at least $5 billion.

In Costa Rica, the Alvarado administration will ask the Congress for authorization to issue Eurobonds in international markets for at least $5 billion.

The Finance Minister, Rocío Aguilar, reported on November 20 that the country's public debt plans include the possibility of attracting more resources in the international market. One of the alternatives would be to place $5 billion in the next four years.

At the end of 2018, the Costa Rican government needs about $1.5 billion to pay salaries, transfers and debts to state creditors.

According to Rocio Aguilar, head of the Treasury Department, there is currently just over half of the resources needed, which totaled $3 billion.

Aguilar explained to Crhoy.com that there are possibilities that "... The debt issuance contracts will allow them to obtain those resources from here to the end of the year, to successfully close 2018."

In the first of the two days of the swap of debt securities convened by the Finance Ministry of Costa Rica $202 million were successfully negotiated, amount that represents only 6% of the total balance expected to exchange.

To swap debt securities that expire between 2018 and 2020, for others with longer deadlines, the Government of Costa Rica organized an auction on October 25 and 26.

Explained in part by doubts about the economic future in the short term, in Costa Rica credit granted to companies and individuals went from growing at an annual rate of 8% in January to 4% in June of this year.

According to figures from the Central Bank of Costa Rica, in the first six months of the year credit to the private sector has reported a clear downward trend, since in January the amount registered amounted to $34.072 billion and the increase compared to the same month in 2017 was 7.9%.

The Central Bank explained that the short-term loan of almost $870 million to the Ministry of Finance will have no impact on inflation.

From a statement issued by the Central Bank of Costa Rica:

September 25, 2018.In accordance with what is authorized by Costa Rican legislation, the Board of Directors of the Central Bank of Costa Rica (BCCR) agreed, on Tuesday, September 25, 2018, to the acquisition of Treasury Notes, issuedby the Ministry of Finance, for an amount of ¢498,858.8 million.

The increase in domestic debt with terms of less than one year and the growing rise in interest rates are some of the threats that Costa Rica's public finances continue to face.

According to the 2017 Annual Report by the General Comptroller of the Republic, between 2016 and 2017 the percentage of domestic debt with a term of less than one year increased from 15% to 18%, the variable rate rose from 12% to 20%, and the interest rate in dollars grew from 19% to 24%.

The new tax reform proposal being discussed in Costa Rica raises capital gains tax from 8% to 15%, and also excludes recognising as a debt deposits made by issuers in the securities market.

In the view of the National Stock Exchange (BNV), not recognizing deposits made in the stock market as debt leaves it at a clear disadvantage, compared to banks, as a source of financing for companies.Not only does it compromise access to investors' savings, it also significantly limits companies and individuals investment options.

The Ministry of Finance in Costa Rica has announced that between today and August 3 it will try to raise, through means of a direct issue in the local stock market, about $879 million.

Authorities reported that two issues of securities will be offered for sale on the Siopel platform of the National Stock Exchange.The first, of $284 million, will have a gross rate of 9% with maturity in 2020, and the second of $595 million, with a gross rate of 10.79% with maturity in 2028.

The government of Costa Rica announced that in the first semester it would issue up to $2.175 billion in debt securities in the local market, however, as of June it has already issued $3.633 billion.

In February of this year, the Ministry of Finance announced that in the first semester it would issue $2.175 million in debt securities through the auction mechanisms and electronic window in the local market.But according to data from the National Stock Exchange, from January to June, the amount awarded exceeded the initial estimates by 67%.